COVID has young Australians setting sights on home ownership

author-avatar By on January 11, 2021
COVID has young Australians setting sights on home ownership

Photo by Toa Heftiba on Unsplash

New research has revealed almost 45% of young people are more likely to want to purchase a home now.

A survey from Mortgage Choice found the pandemic has caused young people to shift focus to their financial goals, with many feeling more optimistic about home ownership. 

The survey found saving money was now the highest priority for young people, with over 60% reducing their spending to buy a home sooner. 

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
VariableMore details
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
VariableMore details
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^

Rates correct as of October 27, 2021. View disclaimer.

Additionally, almost 60% of respondents were adding more money to their savings account and over 40% were applying for government grants for first home buyers.

Susan Mitchell, Chief Executive Officer at Mortgage Choice, said COVID had given everyone a wake up call, which for young people meant evaluating their financial goals. 

“Despite the challenges of getting into the property market, young people are not giving up on the great Australian dream," Ms Mitchell said.

"In times of uncertainty, it is human nature to want stability, and this is what investing in property can provide.

“The fact that first home buyers can now access the most competitive home loan rates on record and unprecedented levels of government support such as grants and schemes provides compelling incentives to act on property ownership dreams.”

The survey found 85% of respondents had changed their saving and spending behaviour since the pandemic, with 70% planning to maintain these habits. 

Although keen on buying property, many young Australians found the process to be complicated.

Almost a third of first home buyers had minimal confidence in understanding and choosing home loan features, while 10% were not confident at all. 

'Rainy day' fund takes highest priority 

Over half of Australians said COVID had forced them to change their 2021 financial goals compared to previous years, a survey from ME Bank revealed.

Building up a 'rainy day' savings was the most listed financial goal and listed as the number one in terms of importance. 

Other popular goals included saving for a holiday, car, or other expense, saving enough to buy a property to live in, cutting back on expenses, and building wealth for retirement. 

According to the study, 66% of Australians said the pandemic had enlightened them as to the importance of having a 'rainy day' fund. 

ME’s General Manager Personal Banking Claudio Mazzarella said the survey was encouraging, given a recent ME Bank survey's findings that 21% of households had less than $1,000 in savings.

“In uncertain times it pays to focus on what you can control. Growing a stash of emergency money can be good for your bank balance – and your peace of mind," Ms Mazzarella said.

The biggest barriers in the way of Australians reaching their 2021 financial goals were reported to be ‘inadequate incomes’ (41%) ‘expenses’ (37%), and the ‘impact of COVID-19’ (28%).

Overall, the minority of respondents (29%) said they were ‘very likely’ to achieve their goals in 2021, indicating a general lack of confidence in attaining them.


Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

Latest Articles

author-avatar
Alex joined Savings.com.au as a finance journalist in 2019. He enjoys covering in-depth economical releases and breaking down how they might affect the everyday punter. He is passionate about providing Australians with the information and tools needed to make them financially stable for their futures.

Collections:

Be Savings smart.
Subscribe for free money newsletters.

By subscribing you agree to the Savings Privacy Policy